Most people who end up looking at a Carrington entry on their credit report are not looking at a simple missed payment. They are looking at what happened after a forbearance, a repayment plan, a modification or an escrow change — a period when the account was being handled differently, and the reporting did not keep up.
What a servicer is, and why the workout period is the risky part
Carrington Mortgage Services is a mortgage servicer. A servicer is generally not the owner of the loan; it is the company paid to administer it — taking payments, running escrow, handling loss mitigation, and reporting the account to Equifax, Experian and TransUnion each month.
Ordinary months are easy to report. The months that go wrong are the ones where the account is not behaving normally, because that is where a servicer has to make a judgment about what code to send: is this month current, is it delinquent, is it in a plan, is the plan performing? Every one of those is a decision, and a decision can be made wrongly.
Where a workout becomes a credit reporting error
- A forbearance reported as delinquency, when the payments were paused by agreement.
- Missed months reported during a trial modification that was being paid on time under its own terms.
- A completed modification still reported at the pre-modification balance, so the account looks larger than it is.
- Deferred amounts reported as past due rather than as deferred.
- Escrow shortfalls treated as delinquency, so a disagreement about taxes or insurance becomes a late payment.
- A loan discharged in bankruptcy still reported as owing, or carrying a balance after discharge.
- Payments credited late or to the wrong loan after a servicing transfer, reported as missed months.
A mortgage is usually the largest account on a credit file, so a single mis-reported month moves a score further than almost anything else — and it does so at the point people are least able to absorb it, which is usually immediately after the difficulty that led to the workout in the first place.
The paperwork is the case
Workout errors are unusually provable, because a workout generates documents. If you agreed to a forbearance, there is a letter. If you entered a trial plan, there is a plan with dates and amounts. If the modification completed, there is an executed agreement with a new balance and a new payment. Those documents establish what the account should have looked like each month, which is exactly what a credit reporting claim needs.
Keep them, and keep the statements that show what you actually paid and when.
Who is answerable
Any company that reports information about you to the credit bureaus is a furnisher under the Fair Credit Reporting Act, and those duties are not discretionary.
When you dispute an item with a credit bureau, the bureau must conduct a reasonable reinvestigation, and the furnisher must investigate, review what the bureau sends it, and report back. If the information is inaccurate or incomplete, it has to be corrected with every bureau it was reported to.
Whether that happened is recorded in the companies’ own systems — the dispute file, the automated codes passed between bureau and furnisher, and the record of what a human being reviewed, if anyone did. Those records come out in a case and nowhere else. A dispute is answered by whatever a company chooses to tell you; litigation is answered by what it has to produce.
Dispute with the bureaus, not only the servicer
Telling the servicer it has made a mistake is sensible and worth doing, but the furnisher’s investigation duty is triggered by a dispute filed with a credit bureau. A complaint made only to the company can leave the strongest part of a claim unavailable.
Send the dispute to Equifax, Experian and TransUnion, in writing, with the agreement and the payment records attached, and keep proof of when you sent it.
What the statute allows
For a negligent violation, a consumer may recover any actual damages sustained as a result of the failure, together with the costs of the action and reasonable attorney’s fees as determined by the court.
For a willful violation, a consumer may recover actual damages or statutory damages of not less than $100 and not more than $1,000, plus such punitive damages as the court may allow, and again costs and reasonable attorney’s fees.
After a workout the actual damages are often immediate: the refinance that was the whole point of completing the modification is declined, or priced as though the delinquency were still live.
The deadline
An action must be brought no later than two years after you discover the violation, or five years after the violation occurred, whichever comes first. Write down the date you first saw the error.
What to send us
- The forbearance letter, trial plan or modification agreement, whichever applies
- Your mortgage statements across the workout period
- Your credit report from each bureau, showing how each month is coded and under whose name
- Proof of the payments in question — bank records, confirmations, canceled checks
- The discharge order or payoff letter, if one applies
- The dispute you filed, to which bureau, and proof of when
- Every response, including any letter saying the item was verified
Pull all three reports rather than one. An account reported correctly at one bureau and wrongly at the other two is itself evidence about the investigation.
What it costs
The fee provision is written into the Act: in a successful action the costs and reasonable attorney’s fees are recoverable from the defendant, as determined by the court. That is why this work is handled on a contingency basis rather than billed by the hour.
You pay nothing unless we win.
Where your situation fits
If your loan moved to a different servicer, see our pages on Shellpoint Mortgage Servicing and Select Portfolio Servicing. If a subservicer is administering the loan for the bank that owns it, see Cenlar. If the bureau is the one refusing to correct the entry, see the credit bureau lawyer page. If you are still at the dispute stage, start with credit report dispute lawyer. Where a dispute has already failed, the FCRA lawsuit page sets out who can be sued. Our directory of mortgage servicers lists contact details for the major companies.
Have your report reviewed
The Kim Law Firm represents consumers in Fair Credit Reporting Act cases against mortgage servicers, the credit bureaus, the specialty reporting agencies, and the companies that furnish information to them. Send us the agreement and your reports and we will tell you whether we see a claim.
Contact us to have your credit report reviewed.
Admitted in Pennsylvania and New Jersey; available to appear pro hac vice in other federal courts.
This page is about credit reporting accuracy. The Kim Law Firm is not affiliated with Carrington Mortgage Services, LLC, and this page is not a complaint about that company. It describes how mortgage servicing and loss mitigation can produce credit reporting errors and what the Fair Credit Reporting Act requires when they do.